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4B Sales Tax Corporation Minutes - 09/07/2007L MINUTES OF THE 4B SALES TAX CORPORATION September 7, 2007 Present: Warren Ayres, President § Darron Leiker § Ray Gonzalez § Corporation Board Members Bob Seabury § Alan Donaldson § Randy Schaffner § Matt Benoit, Assistant City Manager § City Staff Linda Merrill, Recording Secretary § Christie Perry § Backdoor Theatre Absent: Jim Ginnings, Councilor At -Large § Corporation Board Member 1. CALL TO ORDER President Warren Ayres called the meeting to order at 3:35 p.m. 2. APPROVAL OF MINUTES (MAY 11, 2007) Mr. Ayres noted the word "debut" should be changed to "debt" (on page 4). Bob Seabury moved, seconded by Randy Schaffner, that the minutes be approved as corrected. The motion carried. 3. CONSIDER A REQUEST FROM BACKDOOR THEATRE. Mr. Ayres introduced Christie Perry, here to present a request from the Backdoor Theatre for financial assistance for capital improvements needed at the Theatre. Ms. Perry noted that the Theatre is located in what was an ice house building at the turn of the century. It has been running in its present location since 1976. Before that, it was housed in the Weeks Mansion, and also in a church building. The Theatre consists of a dinner theater, seating 110, and a main stage, which seats 170. She noted that the details of the Theatre's request were included in a letter previously furnished to the Board. To expand upon the request, Ms. Perry presented photographs identifying the areas needing improvement: 46 Minutes — September 7, 2007 2 • doors don't shut properly • masonry foundation is cracking and peeling • windows need replaced • access to building is not wheelchair accessible • electrical repairs are needed • the carpeting dates back to the 1970's • sub - flooring is crumbling • outside is unappealing to tourists; needs landscaping • roof leaks • lighting needs improved • air conditioning needs protected Ms. Perry noted that another building on the site is used for storage. It, too, is run down. If every penny they request is received, they would also renovate the Standing Room Only room, replace seating, and create a new box office for the Dinner Stage. Backdoor has received a combined $76,000 from private donors, the Alcoa Foundation, and the Bridwell Foundation. They have also received about $5,000 of in- kind donations. Their goal is $258,000. She understands that funds are not usually available at the end of the year from this Board, but a commitment of funds would help them with other grants. Mr. Schaffner asked how many square feet were necessary in order for Backdoor Theatre to conduct its operations. Ms. Perry replied that she had no idea of the size of the Theatre. Mr. Schaffner asked if the Theatre had considered moving. She stated the Board prefers the small venue of its current location. Any move would necessitate moving out of the downtown area, which they do not want to do. Mr. Ayres asked whether an engineer had looked at the structural condition of the building. Ms. Perry stated that an engineer had looked at the Cunningham building, also on the Theatre property, but no one has brought up the structural condition of the Theatre as a cause of concern. There is nothing to show that the foundation is shifting. The big issue are the floors; they were not well ventilated at the time of construction, and are now suffering the effects of condensation from the air conditioning. Otherwise, it is a big, brick building that is not going anywhere — but the roof would probably start to "do terrible things" in 10 years if improvements are not made. Mr. Seabury noted that his wife is from a small California town which has a community center. The center houses a theater, a senior zone, and a daycare, among other activities. It would be nice if Wichita Falls could have such a facility. Darron Leiker noted that concept plans for a recreational facility envisioned by the Park Board and Jack Murphy do not include a component for a small theater. Salinas, Kansas had its own theater. It was a enough of a priority for the community to issue bonds to fund its construction. 413 Minutes — September 7, 2007 3 Mr. Schaffner wondered how MPEC could fare as a home for the Theatre, as it would still be a downtown location. Darron Leiker noted the Auditorium is an available facility, as well. Alan Donaldson assumed that, if the Theatre does not relocate, a plan is in place to assure that funds are set back to address these types of issues so that it is not in the same spot 10 years down the road. Ms. Perry noted that, until mid -2006, the accounting for the Theatre was very sketchy. A new accountant has cleaned up the books and set up an annual budget that includes money for advertising and repairs. Ray Gonzalez asked if the Theatre is seeking any matching grants. Ms. Perry responded that the Kresge Foundation grant is 30% matching. However, the Theatre would have to pay the cost for an official audit, so they're holding off on that for the moment. Like the Priddy Foundation, however, the Kresge Foundation will not issue a check until the Theatre has raised its stated goal. The Theatre has raised $76,000 of its $258,000 goal. Mr. Ayres asked if the Priddy Foundation had made a commitment. Ms. Perry stated that it had just received the Theatre's application. It will probably fund 20% of the Theatre's goal; the Foundation had been funding the Theatre's operating expenses for the past two years. Mr. Seabury asked if the Theatre's only real income is derived from admissions. Ms. Perry added that it relies heavily on grants and private donations. Mr. Seabury asked if United Way could provide any assistance. Ms. Perry replied that she had not looked into that possibility. Mr. Leiker asked what the Theatre's request was of the 4B Board. Ms. Perry replied that any amount of funding would be appreciated, but they are requesting $30,000. The Theatre wants the money to come from varied sources. She will appear before the TIF Board on Money to request assistance. Mr. Gonzalez asked if this project was included in the request from outside agencies, or in the CDBG funding. Ms. Perry replied affirmatively, stating that it is eligible. Mr. Leiker noted those CDBG funds are part of the allocation set aside for flood relief, and cautioned Ms. Perry not to be too optimistic about receiving those monies. Mr. Ayres asked if Backdoor typically receives funding from the City through the Arts Commission. Ms. Perry replied affirmatively, adding that the Theatre did receive funding. Mr. Benoit clarified that the CDBG request is specific to wheelchair accessibility to the Theatre. Mr. Leiker observed that the Theatre received funding from the hotel /motel tax fund. The Council tasks the Arts Commission with prioritizing all the requests from the arts agencies. He reiterated that the CDBG funds will most likely not be available, but rather, will be used to assist the victims of the recent flooding. 4B Minutes — September 7, 2007 4 Mr. Ayres requested confirmation that this request would fall within the Board's legal ability to perform. Mr. Benoit replied affirmatively. Mr. Leiker stated it falls within the category of culture. Ms. Perry noted that if every single show was sold out, 50% of its operating costs could be covered. Mr. Schaffner asked if the Theatre could fill 200 -250 seats. Ms. Perry cautioned that not every show is a sell -out. But there has been discussion about having a bigger venue, and thus being able to offer bigger shows. She does believe that would bring in more people. Mr. Ayres thanked Ms. Perry for her presentation, assuring her that a decision would be made and she would be contacted. She thanked the Board members for their time and left the meeting. 4. CONDUCT A BUDGET FOR THE 2007 -2008 FISCAL YEAR. Mr. Benoit noted that back in May, the Board entertained requests for funding for softball fields and enhanced gymnasium space. He formulated a financial forecast to give an indication to the Board of its status. The Board has paid for the Mobile Data Terminal (MDT) consultant. The City will soon be negotiating contracts. However, what was initially thought to be a $4.1 Million project is going to cost $4.6 Million. The ending available balance in October is a negative $404,000. This is not fiscally irresponsible; the Board has simply funded a lot of projects. It is probably a good time to "cool it" for a while. He did note that the forecast does include the funding for the MDT's. In October 2007, the budget reveals $1.6 Million of unspent money for projects taken on this year — MPEC repairs, softball fields, enhanced gymnasiums. There will be new debt service for public safety projects — radio maintenance, records maintenance, computer aided dispatch, Sheppard AFB Military Affairs, as well as debt service for TIF and the golf course renovations. Once the MDT project is thrown in, the $1.6 Million in encumbrances becomes $8 Million. State law allows the Board to award a contract at the fund's ending available balance, plus all the revenue that will be collected in that year. In essence, the Board could add $3.3 Million to its negative available balance to award for new projects. The fund balance will be back at $1 Million by March 2008. Mr. Ayres asked what projects the Council may be considering in the next fiscal year. Mr. Leiker stated the next big thing are the Mobile Data Terminals. There may be some Lake Wichita development or Parks and Recreation projects down the line. Mr. Schaffner asked if there are fluctuations in the amount of sales tax collections. Mr. Leiker stated the estimate shown is a conservative one. Mr. Seabury expressed concern that the Board would be viewed as extravagant. Mr. Ayres agreed that that the $4.6 Million project makes the budget picture look bad, but it is the biggest project this Board has taken on. Mr. Benoit noted that he took the $4.6 Million and broke it out over 18 months, at a cost, on average, of $250,000 per month. 413 Minutes — September 7, 2007 5 Mr. Seabury asked if the Mobile Data Terminals are really necessary. Mr. Leiker replied that they are, and that the Council is behind the project. Mr. Leiker acknowledged that the negative number is a shocker, but a lot of projects have been done. Over time, the funds will once again be available and the Board will have the opportunity to do more projects in different areas. Mr. Leiker asked Mr. Benoit if he had included in the budget projection any revenue from TIF reimbursements. Mr. Benoit stated that he assumed $30,000, adding that if there is to be a reimbursement, it will come in the much later years. Mr. Leiker noted the TIF zone is doing better than was projected. There is the prospect of a hotel going within that zone that was not originally anticipated. Mr. Benoit noted the sales tax is estimated to grow at 4.1%. It is not applied to actual collections this year, but rather, it is applied to actual collections from fiscal year 2006 — essentially 20 months ago. That is about as conservative as one can do. It is the same approach that Jim Dockery uses for the City budget. There are two sets of debt service — public safety, CAD /RMS, training center, radio system. On the positive side, things will open up. That debt was issued in 5, 10, and 15 year series. This is the fourth year of the five -year series. That debt service payment will drop to about 60% of the current amount after the fifth year. The 4B Board pays maintenance on the radio maintenance and CAD /RMS projects. Mr. Benoit recommended the budget to the Board, noting that it was not substantially different from those of previous years, except that there is another set of debt service to offset revenue. Mr. Ayres asked if the Board were being requested to approve the Mobile Data Terminals at this point. Mr. Benoit replied negatively. Mr. Ayres noted that it was included in the budget that was provided to him. Mr. Benoit apologized, adding that the Board will only be asked to amend its budget when the actual project is brought before them. Mr. Donaldson moved, seconded by Mr. Gonzalez, that the budget be approved. The motion carried unanimously. Mr. Ayres asked if the Board wished to consider Backdoor Theatre's request at this time. Mr. Donaldson asked if the Defense Diversification Project would encompass the Theatre. Mr. Leiker envisioned a plan to enhance economic development could come out of that project, but no money to renovate the Theatre. Mr. Leiker suggested to the Board that it approve the request for $30,000, provided the Theatre comes up with a matching pledge. It would take them a bit of time to come back with the matching funds, possibly in the January/February timeframe. The 4B Minutes — September 7, 2007 6 Board would then have a positive fund balance on the books. He then asked for clarification that Ms. Perry stated the Theatre had $76,000 in matching funds. Mr. Ayres noted it was his understanding that the Bridwell and Alcoa Foundation had pledged $35,000 between them; they had raised $31,000 cash from donations, and had $5,000 of in -kind donations. They were hoping to get 20% of their $258,000 goal from the Priddy Foundation. Mr. Ayres suggested the Theatre be required to use the 4B funds to match the Priddy donation, rather than the Priddy Foundation funds being used to match the 4B funding. Mr. Benoit observed that the Theatre would have to find money to match the 413 donation with which to match the donation from the Priddy Foundation, to which Mr. Ayres agreed. Mr. Schaffner asked how the Board felt about the long -term integrity of the building. Mr. Seabury stated that, being a builder, he likes new things. Mr. Gonzalez observed that the Backdoor Theatre is a company of artists. Mr. Donaldson stated that they seem to belong in that location. Mr. Schaffner agreed, but expressed concern that with any construction project, there are always another 20% to 30% of associated fees and expenses that were not anticipated. Mr. Schaffner expressed the need for someone like Dick Bundy to say the project can be accomplished for "x" amount of money. Mr. Ayres agreed, noting the Theatre has gone to different contractors, but not brought these projects together as an overall plan. He feels the need to have a structural engineer look at the soundness of the subfloor. Mr. Leiker questioned whether they have checked with Building Inspection to determine if they can stop at the repairs they have in mind, or whether Building Code 'laws would require that more work be done. Mr. Ayres amended his motion to include that, before the 4B would fund any proposal, the Backdoor Theatre have a structural engineer determine whether it is structurally sound and whether it can pass City building code requirements. Mr. Ayres asked if the 4B Board could require the Theatre to submit their repair plans to the City for its review. Mr. Leiker replied that is required under City ordinance. Mr. Seabury asked if a capital improvement bond was possible, as there are so many things this city needs. Mr. Leiker replied that no debt is coming off the books for another four or five years. That does not preclude the issuance of more debt, but there are no current plans to do so. Alan Donaldson seconded Mr. Ayres' amended motion, which carried unanimously. Mr. Benoit agreed to draft a letter to outline the Board's proposal to Backdoor Theatre. 46 Minutes — September 7, 2007 7 5. ELECTION OF OFFICERS. Mr. Seabury moved, seconded by Mr. Gonzalez, that Warren Ayres be reelected as President. The motion carried unanimously. Mr. Ayres asked for volunteers to serve as Vice - President. When no one spoke, he asked Mr. Schaffner if he would serve, and he agreed. The Board voted unanimously in favor of Mr. Schaffner's election. Mr. Ayres then asked for a volunteer to serve as secretary- treasurer. Mr. Gonzalez moved, seconded by Mr. Leiker, that Alan Donaldson serve in this position. Mr. Donaldson agreed, and the motion unanimously carried. Mr. Seabury gave an update on the Curtiss Jenny. The Museum of North Texas History has funded the considerable improvements of the hangar at Kickapoo Airport, including insulation, a new roof, sheet rock, installing windows and air conditioning. The plane has been repainted to be identical to a Call Field trainer. There will be a Model -T Ford in the hangar that will also be painted in the olive color. As it is a living museum, anything included in the exhibit has to be in running condition. Tom Danaher is in the process of getting the airplane certified. David Martin is getting it certified as air worthy. The insurance company has two requirements — the plane shall not be flown more than 50 miles from the airport, and can only be flown by Danaher or Martin. Mr. Seabury believes the museum and the airport renovations might be completed at the same time, and he envisions a joint grand opening. Mr. Leiker noted that the idea of having a larger open house has been considered, as it has been a couple of years since Kickapoo Airport has held an open house. Some of the other pilots might bring out their planes and offer free rides. Media coverage of the event could be arranged. Mr. Schaffner asked if any thought had been given to relocate the building (behind the former post office) on Call Field Road to the museum site. Mr. Seabury expressed doubt that there would be room for the building. 6. ADJOURN. The meeting adjourned at 4:47 p.m. Warren T. A res President